Interview with Antonio Marin-Bataller
In our section "Expert Interview" you will get insights into the real estate market and into the knowledge of our experts. This is followed by an interview with Antonio Marin-Bataller on the topics Private Rented Sector (PRS), Build to Rent (BTR) Sector and investing in BTR in the UK.
What exactly is PRS?
PRS literally means the Private Rented Sector, and it refers to residential properties that are used for rental accommodation. This sector is now the fastest growing housing tenure in the UK, having played an important role in both the regions and London in tackling the chronic undersupply in housing over the last eight years. However, within this broad category there are different types of assets, owners and investors, and one important distinction to make is between buy-to-let assets that are owned by private individuals, and the residential towers, that are owned by companies or organisations. While both fall within the broad definition of PRS, it is the institutionally owned residential towers that UK institutional investors refer as PRS assets and that PATRIZIA develop as purpose built Build to Rent (BTR) schemes.
What is the Build to Rent sector?
Build to Rent (BTR) assets are purpose built developments that are specifically designed and built for rental use, and to be owned and managed by one party. Put simply, BTR means a development that comes under single ownership and is a professionally managed rental asset.
This type of asset, compared to a buy-to-let property, offers a series of benefits to both investors and renters, through the economy of scale offered by its very nature, and the operating efficiency that can be achieved by the design process. BTR offers an attractive opportunity for investors because of its cash on cash returns and the inflation hedge offered by the nature of the in-demand asset. Furthermore, BTR also offers an attractive prospect for renters. The asset has been created with their needs at the forefront of the design, providing quality accommodation and amenities. BTR assets are increasingly becoming synonymous with a lifestyle choice offering independence, flexibility, security and community.
How is PATRIZIA investing in BTR in the UK?
Our first two BTR schemes are located in Manchester and London. First Street in Manchester has planning permission for the construction of 624 BTR apartments and will form a key part of a wider 20-acre mixed-use development, including an extensive retail and leisure offer as well as offices. Trocoll House in London comprises the development of a 28-storey tower with detailed planning consent for 198 BTR apartments. Located in the London Borough of Barking and Dagenham, with is direct access by train to Central London in just 14 minutes.
Following on from these initial investments, we will control a pipeline of 1,200 BTR apartments by the end of 2016. Our aim is to build a portfolio of 2,000 to 2,500 BTR apartments in the UK by 2020. Our portfolio will offer renters a professionally managed, flexible, high quality and affordable accommodation in thriving and in easily accessed urban centres, whilst investors will benefit from a unique, nationally diversified, BTR portfolio that generates long term sustainable returns.